Andy Burnham, the Prime Minister and leader of the new Labour government, has unveiled a significant initiative aimed at reducing youth reliance on Department for Work and Pensions (DWP) benefits. From October 2026, small businesses will be eligible to receive a £2,000 lump sum for each under-25 apprentice they employ as part of efforts to strengthen the connection between education and the workplace.
This measure comes amid growing concerns highlighted by the Milburn Review, which warns that over one million young people face the prospect of remaining on benefits indefinitely. Mr Burnham’s approach includes offering bursaries to parents whose children undertake apprenticeships, aiming to provide both support and incentives.
A government statement detailed the broader investment in education: “This builds on wider investment already helping colleges expand where demand is highest – we are committing £9 billion into education for 16 to 19-year-olds in 2026-27, enabling providers to develop high-quality pathways for thousands more learners.”
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Additionally, the government is investing an extra £287 million to create over 22,000 new places across colleges and post-16 education providers in England. This funding supports 87 projects, including expanded construction courses to train more young people for trades such as bricklaying, plumbing, and decorating.
Philip Hoare, Group Chief Executive of Balfour Beatty, praised the scheme, stating:
“Apprenticeships change lives. They open doors to skilled careers, help employers build the workforce they need and play a vital role in supporting long-term economic growth. We support the Government’s commitment to removing barriers for young people accessing these opportunities and increasing support for employers investing in the next generation. As a long-standing champion of apprenticeships, Balfour Beatty sees first-hand the difference they make to individuals, businesses and communities across the UK.”
Research from the Milburn Review also found that of young people not in education, employment, or training (NEET) for less than a year, 65% return to participation the following year. However, only 25% of those NEET for more than a year re-engage.
Simon Ashworth, Deputy CEO and Director of Policy at the Association of Education and Learning Providers, welcomed the bursary initiative:
“The new bursary of up to £4,500 a year is a welcome step that removes a significant financial barrier preventing some young people from both taking up and completing apprenticeships. By tackling the household benefit trap, more young people will be able to choose an apprenticeship based on their ambitions rather than their family’s finances.”
He continued, “If we are serious about reducing the number of young people who are not in education, employment or training, we have to make it easier for employers to recruit them. Fully funding apprenticeship training for eligible under-25s is a major step toward that goal and should encourage many more businesses to invest in the next generation of young talent.”